Tuesday, August 24, 2010

BP (NYSE:BP) Gave Okay to Deepwater Horizon Use with 390 Overdue

When BP did an internal audit of the Deepwater Horizon oil rig, it found about 390 overdue maintenance problems, yet still decided to go ahead and let it begin operations, leading to the explosion and ultimate consequences associated with it.

The 390 overdue maintenance problems were revealed by BP’s Gulf of Mexico marine authority, Neil Cramond, when talking to investigators from the Bureau of Ocean Energy Management and U.S. Coast Guard.

BP’s audit said: "With excessive overdue maintenance and the recent introduction of more maintenance routines, it would appear that the
maintenance department is struggling to stay in touch with the planned maintenance schedule."

Even so, the final decision on whether or not to put the rig into
operation was BP's, as Cramond admitted and confirmed when queried by a lawyer from Transocean (NYSE:RIG) at the hearing.

Much of this is being done to determine, what, if any, liability
Transocean and others may have in relationship to the damage done from the explosion of the oil rig, which killed 11 workers and gushed oil into the Gulf of Mexico.

One of the most important pieces of evidence, the blowout preventer, is still on the Gulf floor, and is being worked on now to detach from the pipe in order to bring it to the surface as it was when it went down with the Deepwater Horizon.

At that time a lot more clarity will be added to the situation to make decisions on overall liability and how far it will extend beyond BP.

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